There are so many more investment opportunities out there than what you see on Wall Street. With a Self-Directed IRA (SDIRA), you can tap into the expansive landscape of alternative investments, including private placements. Some of the most innovative and exciting companies fund their growth with private placements. A Self-Directed IRA enables you to invest in private placements with the added bonus of tax advantages. You can gain control of your retirement investing by placing greater stock in your business instincts.
Private placements enable individuals to have the opportunity to invest in privately-held companies beyond the public market. These offerings are typically open to a select group of investors. Private placements can take many forms, including:
Private placements are typically offered to accredited investors, a term for individuals or institutions with high net worth or income. Options exist for non-accredited investors, but those options often have certain restrictions. Even so, exploring the possibilities for private placements can broaden your retirement horizons. Crowdfunding platforms, for example, allow non-accredited investors to invest in private placements.
Private placements may possibly offer better returns than Wall Street products because you can potentially jump in during a company's early days and set yourself up for gains if the company grows. Plus, private placements generally aren't as vulnerable to market volatility since they're not publicly traded.
Why use a Self-Directed IRA instead of investing with personal funds? Liquidity, for one. Many companies impose a waiting period before investors can cash out. The extended wait more closely aligns with the essence of retirement savings as opposed to the transactional nature of cash. Plus, the tax advantages of an SDIRA let you grow any gains tax-free or tax-deferred.
Another benefit of investing in private placements with an SDIRA? Diversification. An SDIRA allows you to spread your retirement savings across multiple asset classes, including real estate, cryptocurrency, and, as we’ve discussed, private placements.
Because they are not publicly traded, private placements do not have to adhere to the same regulations and disclosure requirements as public offerings. Therefore, it’s important to conduct due diligence before investing. Here are a few questions to ask before placing an investment in a placement:
Investing in private placements through a Self-Directed IRA is easier than you might think. Here's how you can get started:
If you're ready to gain control of your retirement savings and explore the potential of private placements, Broad Financial, along with our sister company and in-house SDIRA custodian, Madison Trust, can help you get set up. We specialize in Checkbook IRAs that allow you to conduct your everyday private placement investment transactions in real time. Contact us to learn more today!
Disclaimer: Broad Financial LLC does not provide legal, tax, or investment advice. Please consult with your tax or legal advisor before making investment decisions.
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